The Drilldown: Global oil prices tumble after three days of gains

Oil prices on Monday declined after three days of gains with worries of a supply glut resurfacing thanks to new data showing production levels were higher in April than intended.

The Organization of Petroleum Exporting Countries saw production surge by the most in almost 30 years in April, a Bloomberg news agency survey showed, as member countries kept pumping vast amounts of crude even after they reached a price-war truce earlier in the month.

Moreover, increasing tensions between the United States and China are only increasing market anxiety, as U.S. Secretary of State Mike Pompeo made accusations Sunday that there is “a significant amount of evidence” that the COVID-19 virus was fabricated in a Chinese laboratory.

A series of preoperative tests on power plants have been delayed by Mexico’s Centro Nacional de Control de Energia (Cenace) due to the ongoing concerns about COVID-19. The tests were to be used to analyze the nation’s current electrical system and potentially implement new clean-energy projects to assist with the reliability of the energy supply, according to Bloomberg.

There is concern that strategies being put in place by the commission will negatively impact producers of renewable energy, while giving a hand up to non-renewable energy plants run by the nation-owned electricity commission, the Comision Federal de Electricidad.

Meanwhile, Mopani Copper Mine, a Zambian subsidiary of Glencore, revealed yesterday that it will reopening its mining operations, but still intends to put the mining site under “care and maintenance.” The mine has experienced backlash from the Zambian government, even facing threats of having its mining license revoked for not having given enough notice, Reuters reports.

Coastal GasLink will begin the development of a 900 person work camp and is scheduled to have the space up and running by summertime. The Vanderhoof Lodge will be located about 100 kilometres west of Prince George, with the intent of housing pipeline crews working on the Coastal GasLink natural gas pipeline. Although the pipeline project faced major push back earlier this year when Wet’suwet’en camps were taken over by the RCMP, this project is being developed with support from both the Saik’uz First Nation and Nakazdli Whut’en.

In other news, the Keystone XL pipeline could be put on hold for up to a year, according to TC Energy Corp., after a permit imperative to the development of the project was blocked by a federal judge last month, as Bloomberg details.